A report from the Brussels-based think -tank Bruegel, that calls for unified legislation on cryptocurrencies and more scrutiny on how they are distributed to investors will reportedly be distributed to European Union (E.U.) ministers for the meeting that is scheduled to take place in Austria from September 7-8.
As reported by Reuters on September 5, the Belgian think tank has released the report just ahead of an informal meeting of economic and financial affairs ministers from the E.U. on cryptocurrency investments and taxation of the digital economy. The report urges the regulation of cryptocurrency exchanges and Initial Coin Offerings (ICOs) at the E.U. level in order to manage associated risks and harness the potential of blockchain technology.
Bruegel’s report also adds that the development of regulations for Cryptocurrency is difficult due to their virtual nature, implying that the crypto trading platforms should probably face stricter disclosure rules or even a potential ban. Brugel brought in China’s cryptocurrency approach as an example and suggested: “as done in China, mining farms can be forbidden.” Citing the crypto crackdown in Asia, that lead to the upcoming move of crypto exchange Binance to the island state of Malta, the report notes a “scope for regulatory arbitrage.”
Furthermore, Bruegel observes that there is a need “to experiment and learn about the best approaches to this fast-developing technology,” and the regulators should tolerate crypto exchanges that move in order to seek jurisdictions with more laissez-faire regulations.
According to a report by Bloomberg, the agenda of the meeting of E.U. ministers is to discuss the challenges posed by digital assets and the possibility of tightening regulations. A draft implies that the general lack of transparency in the industry and the potential for cryptocurrencies to be used for tax evasion, terrorist financing, and money laundering would also be a key topic.